Housing grant may be recalled Auditors urge HUD to rescind $20 million for Hollander Ridge

Poor prospects for viability

Henson assails audit

HUD often fails to take auditors' advice

December 30, 1997|By John B. O'Donnell | John B. O'Donnell,SUN STAFF

As Baltimore reconsiders its plans for the troubled Hollander Ridge public housing project, federal auditors have urged the Clinton administration to rescind a $20 million grant for redevelopment of the complex.

In making their recommendation to top officials of the Department of Housing and Urban Development, the auditors noted poor prospects for the long-term viability of Hollander Ridge, deficiencies in Baltimore's application for the funds and irregularities in the award of the money.

The recommendation by HUD's office of inspector general is the latest twist in the troubled history of the sprawling 1,000-unit development. On the eastern edge of the city, Hollander Ridge was opened in 1976. Almost from the beginning, it prompted complaints about crime from its own residents and neighbors in the adjacent Baltimore County community of Rosedale. It also has been a source of friction between the city and county governments.

The recommendation on Hollander Ridge was part of a 118-page report in late October that examined HUD's award last year of $480 million for the reconstruction of the nation's "most distressed" public housing projects. HUD received 138 applications for $2.2 billion and awarded 44 grants.

The Hollander Ridge award was the only one that auditors recommended for cancellation. Nevertheless, the prospects that their recommendation will be followed appear slim.

HUD frequently fails to follow the advice of its auditors.

Calling the audit "flawed," Daniel P. Henson III, the city housing chief, said HUD has not indicated that it will withdraw the grant.

In criticizing the process for awarding the $480 million, the auditors asserted: "HUD did not promote a fair and equitable competition."

They also said that HUD chose Hollander Ridge over at least one meritorious application and that the development's problems were not severe enough to qualify for the funds.

Baltimore's "application is not eligible for the competition" to receive federal public housing renewal dollars, auditors concluded, saying the city hadn't provided the necessary information to support its request or conducted the required public meetings. They also claimed that the city proposed an inefficient use of federal funds.

A HUD spokesman in Washington said yesterday that a decision on withdrawing the grant would be delayed until Baltimore's final plan for Hollander Ridge has been submitted and reviewed. HUD officials had noted earlier that the funds could be used to demolish a public housing project and build a new one elsewhere.

Henson said the city is re-evaluating its plans for Hollander Ridge in light of HUD's decision to grant Baltimore only half the $40 million it had sought.

He confirmed that a group of Baltimore County legislators was told this month that the complex might be converted to housing for the elderly. He said other options are under consideration, but refused to disclose them.

Henson and Mayor Kurt L. Schmoke met with the Baltimore County legislators who asked that Hollander Ridge be demolished. The legislators came away convinced that demolition isn't in the cards, but that elderly-only housing is a possibility.

"The meeting was prompted by the rundown condition and the problems that developments like that bring with it -- a lot of drug addicts and problems with neighbors who are my constituents," said Del. Joseph J. Minnick, a Dundalk Democrat, who organized the meeting.

"Rosedale has had a lot of problems -- crime and diminution of property values," said U.S. Rep. Robert L. Ehrlich Jr., who attended the meeting.

Trying to assuage county critics, the Schmoke administration is planning to build a 10,000-foot wrought-iron fence as a barrier between Hollander Ridge and Rosedale. Henson announced this month that a $1.2 million contract had been awarded for the fence.

Construction should begin in March and be completed in September or October, he said.

Hollander Ridge consists of 522 low-rise housing units in 79 garden apartment structures and a 19-story high-rise for the elderly that has 478 apartments. The owner is the Housing Authority of Baltimore City, headed by Henson.

The agency asked for $40 million in federal funds to cut the number of units in half by demolishing some, rehabilitating others and building 151 new houses that would be offered for sale to prospective homeowners.

The application was filed as a national consulting firm hired by HUD was evaluating the prospects for Hollander Ridge.

"The long-term viability cannot be assured via a reasonable revitalization plan," Abt Associates Inc. wrote in September 1996. "Our recommendation is that the agency demolish and dispose of the property."

Federal auditors cited the consultant's recommendation when they asked HUD to cancel the $20 million Hollander Ridge grant.

Alex Sachs, a HUD spokesman in Washington, challenged the Abt conclusion yesterday, saying agency officials "believe that the long-term viability of the project can be achieved through an effective revitalization plan."

In addition to questioning the future viability of Hollander Ridge, Abt Associates said it would be cheaper to provide tenants with certificates to rent housing on the private market.

The law requires that projects whose future viability cannot be assured be dropped from the inventory of public housing within five years, the auditors said.